David Wayne Kraft of Palm Beach Gardens Florida a stockbroker formerly registered with Morgan Stanley has been suspended indefinitely by Financial Industry Regulatory Authority (FINRA) from associating with any FINRA member in any capacity based upon allegations that the stockbroker neglected to comply with an arbitration award against him by his former employer for $1.2 million in connection with a series of up front foregivable loans. FINRA Case No. 19-01398 (Dec. 10, 2019).
Kraft’s registration with Morgan Stanley was terminated as of April 1, 2019. The $1.2 million arbitration claim was filed by Morgan Stanley on May 17, 2019.
Now, because he did not pay Morgan Stanley the arbitration award against him, he has been barred from the brokerage industry. We also do not know what Mr. Kraft allegedly did to get terminated from Morgan Stanley, but certainly within weeks of his termination, he did not pay back the $1.2 million Morgan Stanley lent him
FINRA Rule 9554, Failure to Comply with an Arbitration Award or Related Settlement or an Order of Restitution or Settlement Providing for Restitution provides that
If a member, person associated with a member or person subject to FINRA’s jurisdiction fails to comply with an arbitration award or a settlement agreement related to an arbitration or mediation under Article VI, Section 3 of the FINRA By-Laws or a FINRA order of restitution or FINRA settlement agreement providing for restitution, FINRA staff may provide written notice to such member or person stating that the failure to comply within 21 days of service of the notice will result in a suspension or cancellation of membership or a suspension from associating with any member. When a member or associated person fails to comply with an arbitration award or a settlement agreement related to an arbitration or mediation under Article VI, Section 3 of the FINRA By-Laws involving a customer, a claim of inability to pay is no defense.
https://www.finra.org/rules-guidance/rulebooks/finra-rules/9554
FINRA Public Disclosure indicates that Kraft is referenced in a customer initiated investment related complaint in which the customer requested $90,000.00 in damages supported by allegations that trades were effected by Kraft without permission from the customer and that the customer sustained losses on unsuitable closed-end funds held in the customer’s account when Kraft was employed by Morgan Keegan Company LLC.
FINRA Public Disclosure reveals that Kraft has been barred from associating with any FINRA member in any capacity based upon accusations that the stockbroker failed to respond to FINRA’s request for information about his activities. FINRA Case No. 2019062268801 (Nov. 4, 2019).
Kraft is also referenced in a customer initiated investment related complaint which has been resolved on November 23, 2015 for $40,000.00 in damages founded on accusations that false or misleading statements were made in regard to mutual fund investments sold by Kraft when he was employed by Morgan Stanley Smith Barney.
